Inventory Flashcards
What is the formula for COGS?
Beginning inventory + Net purchases = Goods available for sale - Ending Inventory = COGS
What is the formula for determining the price index used to compute the dollar value LIFO inventory layer?
Current-year costs/Base-year costs = Index price.
What is the formula for Inventory turnover?
Inventory Turnover = COGS/(Beginning Inventory + Ending Inventory)/2
What is the LIFO inventory cost flow method?
COGS = recent costs
Ending Inventory = Older Costs
LIFO has different values for COGS and Ending Inventory under periodic and perpetual systems
What is the FIFO inventory cost flow method?
COGS = Older costs
Ending Inventory = Recent costs
FIFO has the same values for COGS and Ending Inventory under periodic and perpetual systems.
What is the Dollar-value LIFO the year DVL is adopted?
DVL primarily focuses on the dollar value of ending inventory (EI) instead of the units. The benefits of using price index is that, it removes the effect of inflation before the change in inventory value is considered. Hence when DVL is adopted, the base year always has a price index of 1.00.
What is the weighted average cost per unit formula?
Cost of beginning Inventory + Cost of purchases/ Beginning Inventory units + Units purchased
What is the Gross Profit formula?
Net sales X Gross profit % = Gross profit $
What is the formula for COGS?
Sales - Gross Profit $
What is the default valuation for assets
Historical Cost
What is the difference between Perpetual and Periodic COGS in FIFO?
Perpetual always calculates the COGS at time of sale & Periodic always calculates the COGS at the end of the period.
